Black Friday Crash ends with a US Bounce ahead of G7

CURRENCY TRADING SUMMARY – 13th October 2008 (00:30GMT)

U.S. Dollar Trading (USD) in a fitting finish to a historic week a Friday frenzy saw the Dow Jones range over 1000 points. Taking the lead from a 10% loss on the Nikkei and Crashing European stocks, initially the Dow also crashed lower bouncing off 7800 over 1000 points higher before settling into the close. The G7 met over the weekend in an emergency meeting. The Group expressed it readiness to do whatever it takes to stabilize the Markets. The August Trade Balance was at expectations -$59.1B. In the U.S. share markets, the NASDAQ was up 4 points (0.27%) and the Dow Jones was down 128 points (-1.49%). Crude Oil closed down -$8.89 ending the New York session at $77.70 per barrel. Looking Ahead, more news on coordinated response to financial crisis expected. Bank Holiday in US.

The Euro (EUR) Plummeted as the Crisis hit melting point and Oil fell over -$8 a barrel. The Euro traded at year lows before bouncing with stocks. A lot of focus has been put of the ECB and if the EU can pull together for a united front coming out from the G7 summit. Overall the EUR/USD traded with a low of 1.3258 and a high of 1.3655 before closing the day at 1.3400 in the New York session.

The Japanese Yen (JPY) traded in line with the equity movements surging as the Nikkei crash although found support against the USD at the 98 level which was sharply rejected. Crosses did not fair so well though hitting multi year low on a bevy of currencies as the Yen became the safe haven of choice.  Overall the USDJPY traded with a low of 97.91 and a high of 100.72 before closing the day around 100.60 in the New York session.

The Sterling (GBP) broke the key 1.70 level as risk aversion sky rocketed and waves of GBP/JPY undermined the major. The strong bounce in US equities allow the 1.70 level to be reclaimed into the weekend but remains on a weak footing going forward as the UK economy is hit hard by the crisis.  Overall the GDP/USD traded with a low of 1.6781 and a high of 1.7180 before closing the day at 1.7040 in the New York session.

The Australian Dollar (AUD) hit multi year lows as the Aussie took the brunt of the risk aversion flows. Also hurting was the plunge in Oil and surprising the fall in Gold. The AUD has been the leader on the way down and thus is expected to bounce the strongest on any market recovery. Overall the AUD/USD traded with a low of opened the Asian session on a very weak footing 0.6330 and a high of 0.7878 before closing the US session at 0.6430.

Gold (XAU) broke below $900 and plummeted over $70 an ounce as Oil tumbled and USD strength overwhelmed the precious metal. Volatility in the Gold market has been staying at record highs with direction under debate. Overall trading with a low of USD$827 and high of USD$932 before ending the New York session at USD$849 an ounce.

TECHNICAL COMMENTARY

Currency	Sup 2	Sup 1	Spot	Res 1	Res 2
EUR/USD	1.3344	1.3506	1.3600	1.3786	1.3907
USD/JPY	96.68	97.68	100.65	101.69	103.29
GBP/USD	1.6637	1.6781	1.7130	1.7397	1.7658
AUD/USD	0.6330	0.6437	0.6795	0.7148	0.7355
XAU/USD	800.00	820.00	855.00	935.33	950.00

Euro – 1.3600  

Initial support at 1.3506 (Oct 10 support) followed by 1.3344 (Oct 6 low). Initial resistance is now located at 1.3786 (Oct 9 high) at followed by 1.3907 (Oct 3 high).

Yen – 100.65

Initial support is located at 97.68 (Mar 19 low) followed by 96.85 (Mar 18 low). Initial resistance is now at 101.69 (Oct 8 low) followed by 103.29 (Oct 7 high).

Pound – 1.7130

Initial support at 1.6781 (Oct 10 low) followed by 1.6637 (June Nov 11 2003 low). Initial resistance is now at 1.7397 (Oct 9 low) followed by 1.7658 (Oct 7 high).

Australian Dollar – 0.6795

Initial support at 0.6437 (Oct 8 low) followed by the 0.6330 (Oct 10 low). Initial resistance is now at 0.7148 (Oct 8 high) followed by 0.7355 (Oct 7 high).

Gold – 855

Initial support at 820 (Oct 3 low) followed by 800 (Round Number). Initial resistance is now at 935.33 (Jul 25 high) followed by 950 (round number).